Companies doing business in jurisdictions with managed economies may encounter greater difficulty raising laws and regulations of those jurisdictions as a defense in U.S. antitrust (and other) actions. On September 6, 2011, a New York federal court denied summary judgment to certain Chinese manufacturers of vitamin C in In re Vitamin C Antitrust Litigation, 06-MD-1738 (BMC) (“Vitamin C”), rejecting the manufacturers’ claims that the Chinese government compelled them to fix the prices of vitamin C or that Act of State or comity principles should apply. While Judge Cogan’s rather detailed opinion (72 pages) may suggest that the ruling is limited to the specific Chinese regulatory scheme at issue, businesses operating in similar jurisdictions should take note of a few general principles suggested by the ruling: Continue reading “Foreign Sovereign Compulsion, Act of State and Comity: Can They Save You?”→

Some may wonder why my blog, White Collar Defense and Compliance, regularly reports on the Justice Department’s criminal antitrust record and trends. For white-collar practitioners, the FCPA and criminal antitrust prosecutions regularly lead to opportunities to represent companies and/or officers. Apart from that, there are important reasons to monitor the Justice Department’s criminal antitrust investigations and prosecutions.

First, a criminal antitrust investigation of cartel activity in a specific industry can be a precursor to an FCPA investigation in the same or closely related markets. Second, when a company in an antitrust criminal investigation seeks leniency by cooperating, you can rest assured that all of the officers and employees will be asked about knowledge of potential bribes paid by the company or competitors. Continue reading “DOJ’s Improved Coordination = More Antitrust + FCPA Investigations”→

Like this:

What if the National Basketball Association (NBA) vaguely defined a three-point shot as, “somewhere more or less around the three-point arc?” Would the Dallas Mavericks still have defeated the Miami Heat in the finals?

Fortunately, the rule for three pointers is absolute. Unfortunately, however, the same cannot be said about the language in much of the United States criminal code. Consider the Armed Career Criminal Act (ACCA) which defines a violent felony as one committed “purposefully, violently, and aggressively.”

We face a Congress that puts forth an ever-increasing volume of laws in general, and of criminal laws in particular. It should be no surprise that as the volume increases, so do the number of imprecise laws. And no surprise that our indulgence of imprecisions that violate the Constitution encourages imprecisions that violate the Constitution. Fuzzy, leave-the-details-to-be-sorted-out-by-the-courts legislation is attractive to the Congressman who wants credit for addressing a national problem but does not have the time (or perhaps the votes) to grapple with the nitty-gritty. In the field of criminal law, at least, it is time to call a halt. I do not think it would be a radical step—indeed, I think it would be highly responsible—to limit ACCA to the named violent crimes. Congress can quickly add what it wishes. Because the majority prefers to let vagueness reign, I respectfully dissent.

As noted last Thursday in a Legal Pulse post, the threat of imprecise language extends well beyond this particular case. “The point [Scalia] makes is an important one, especially for those concerned, as WLF is, about the rampant criminalization of business conduct: people “of ordinary intelligence” deserve “fair notice” of a law’s reach.”

Fortunately, it’s not just Justice Scalia who understands the potential hazards of vague laws. At a House Judiciary Committee Hearing on the Foreign Corrupt Practices Act (FCPA) on June 14, two men – both of who are “tough on crime” – railed against the increasing imprecision of criminal laws. Former Attorney General Michael Mukasey emphasized the need to “clarify the meaning of a ‘foreign official,’” the need for a “willfulness requirement for corporate criminal liability,” and the general need for greater “clarity and certainly.” George J. Terwilliger of White & Case LLP added his ideas to “help clarify ambiguity in the statute and its application.”

When the meaning and application of ambiguous statutory terms is left up to prosecutors and regulators, those largely unaccountable officials, in the words of former federal prosecutor Michael Volkov, “become not only enforcers of the law, but also judge and jury.” Mr. Volkov made that, and many other critiques of how the FCPA, at a WLF Web Seminar program today “Is An ‘Effective Compliance Program’ Enough?: Lessons from Foreign Corrupt Practices Act Enforcement Actions and Settlements.” A recording of that live program is available here.

We want Americans to follow the law, but it is fundamentally essential that those laws are well-defined and easily understood.

Federal prosecutors show no signs of relenting in their aggressive anti-corruption efforts after extracting a record-breaking $1.8 billion in 2010 from companies and individuals accused of violations of the Foreign Corrupt Practices Act (“FCPA”). The Department of Justice (“DOJ”) and the Securities and Exchange Commission (“SEC”) have mobilized the resources needed to fight corruption on a massive scale. Continued industry-wide sweeps and targeting of individuals for criminal prosecution should come as no surprise. Directors, officers, employees, business or joint venture partners, compliance officers, heads of internal audit departments, and others conducting business globally must pay close attention to the important lessons coming out of last year’s record number of enforcement actions. Continue reading “Corruption Is Profitable for U.S. Government: FCPA Enforcement Crackdown Continues”→

Our presenter, Mike Koehler, is a Professor of Business Law at Butler University and editor of the FCPA Professor blog. Professor Koehler testified on Tuesday, November 30 before a Senate Judiciary subcommittee hearing entitled “Examining Enforcement of the Foreign Corrupt Practices Act”.